OEM Growth in China

A shift is becoming more and more apparent

December 1, 2025

Michael Robinet

An ultramodern Geely factory in China. (Geely)

Over the almost four decades of having a front row seat to the world’s most exciting and dynamic industry, this author has witnessed scores of events, influences and secular shifts. These include new trade agreements, vehicle efficiency initiatives, new technology integration, the occasional bankruptcy, and, of course, the rise and fall of various sales and production markets.

One secular shift is still apparent today. In the 1980s, several Japanese OEMs entered the North American market from a production perspective. Growing market share in the U.S. and Canada dictated that these OEMs needed to add North American capacity to reduce inventory, equalize currency, and commit to this market. One byproduct of the rise of Japanese OEMs and their methods was a truly influential book. “The Machine That Changed the World” was a must-read for anyone in our industry (still is). This book, led by MIT’s James Womack, outlined the lean production methods by Japanese OEMs and their suppliers. Suffice to say, the industry took notice and applied many of these planning, development and production methods to improve quality, reduce waste, and more quickly react to consumer shifts.

In the U.S. and Canada, virtually every Japanese OEM established production beachheads on this side of the Pacific. The Japanese OEMs are now integral to NA production at almost 5 million units for 2025, according to the S&P Global Mobility North American Production Forecast. Today, they account for a third of all North American volume.

Why the history lesson? The recent rise of Chinese OEMs — both in China and, more importantly, on an export and co-located production perspective outside China — will be a secular shift that the industry will have to adapt to going forward. While it took roughly 40 years for the Japanese OEMs to reach their current state in NA and other markets, the Chinese will tighten their timeline towards growth. Chinese OEMs have a substantive domestic market that’s roughly a third of the global light vehicle volume. Using their considerable economies of scale advantage in combination with new modes (and speed) of vehicle development and technology integration, access to capital and supplier interaction structures is key. They have their sights set on not only gaining share in their own market (they own 70% of the Chinese market today) but also international expansion. Add in leverage with REEs (rare earth elements) and critical minerals for propulsion batteries, and you can see how the Chinese have advantages that the Japanese OEMs could only have dreamt of.

The rise of the Chinese OEMs over the next decade will rival the rise of the Japanese OEMs 40 years ago. The dynamics will be different this time around — geopolitical policies, propulsion systems, supplier interaction/vertical integration, and scale economies. Suffice to say, the growth and impact of Chinese OEMs will be felt globally as export markets in South East Asia, South America, Africa and the Middle East — once dominated by American, European, Japanese or Korean OEMs — deal more and more with Chinese OEMs hungry for share across segments. The share gains are startling. While growth by the Chinese OEMs in the U.S. and Canada is off the table for now (from a geo-political perspective), Western OEMs will compete head-on in an export front where there are no guardrails.

Just as James Womack’s book from 35 years ago showed our industry that new methods would alter the industry forever, so too will the growth of Chinese OEMs, and likely much, much faster.

Michael Robinet is executive director, consulting, for S&P Global Mobility and an SAE Foundation trustee.